Market Update: Corn Futures Dip Ahead of U.S. Harvest Estimates

By Michael Hogan

HAMBURG, Sept 8 (Reuters) – Chicago corn futures experienced a slight decline on Monday as traders positioned themselves ahead of upcoming U.S. government harvest estimates, with expectations of a record crop this year.

The market was supported by a weaker dollar, which made U.S. agricultural exports more appealing abroad. By 1158 GMT, the most active corn contract fell 0.4% to $4.16-1/4 per bushel.

Grain Market Overview

While corn faced downward pressure, wheat and soybean prices showed a modest increase. Wheat prices rose by 0.1% to $5.20-1/2 per bushel, and soybeans gained 0.1% to $10.28-1/4 per bushel.

Traders are closely monitoring world supply and demand reports from the U.S. Department of Agriculture, slated for release on Friday. This report is particularly significant as it will include projections for U.S. corn and soybean harvests.

Expectations for the U.S. Corn Harvest

Commodity risk manager Matt Ammermann from StoneX indicated that the anticipated record harvest is contributing to the weakening of corn prices. Despite some concerns regarding dryness in August potentially impacting yields, the overall outlook remains bearish due to the likelihood of a record crop.

“Even if the crop is slightly smaller than earlier forecasts, it is still expected to break records, which plays into the bearish sentiment,” Ammermann stated.

Soybeans: Mixed Signals

In contrast, soybeans have found some support, as there are suggestions that the USDA may not forecast U.S. crop yields as optimistically as before. However, a notable decline in Chinese purchases of U.S. soybeans adds a layer of bearish sentiment, particularly in the absence of substantial progress in U.S.-China trade negotiations.

“The possibility of increased Chinese purchases this season is diminishing as time progresses amid ongoing trade talks,” Ammermann added.

Production Forecasts

Last week, S&P Global released projections for U.S. corn and soybean production that exceeded the USDA’s August estimates. In contrast, alternative private forecasts indicated lower yields and production figures compared to USDA expectations.

Wheat Market Dynamics

The wheat market has remained slightly firmer due to a weakening dollar; however, the overall tone remains bearish with ample supplies available for export. Support has been somewhat bolstered by cash wheat prices from the Black Sea region, despite dissatisfaction among farmers over current low prices.

“Even though Russian wheat prices have fallen moderately, the prevailing oversupply keeps market sentiment weak,” Ammermann remarked.

(Reporting by Michael Hogan in Hamburg; additional reporting by Ella Cao and Lewis Jackson in Beijing; Editing by Sumana Nandy, Rashmi Aich, and Jan Harvey)

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